Procurador general pone aprueba a la administración de Torrijos

C O N F I D E N T I A L SECTION 01 OF 03 PANAMA 000778



SIPDIS



DEPARTMENT FOR WHA/CEN

SOUTHCOM ALSO FOR POLAD

VANCOUVER FOR CG ARREAGA



E.O. 12958: DECL: 03/18/2015

TAGS: PGOV, PREL, PM, POLITICS & FOREIGN POLICY

SUBJECT: PANAMA ATTORNEY GENERAL TESTS TORRIJOS

ADMINISTRATION, REOPENS CEMIS AND SUPREME COURT BRIBERY

CASES



REF: PANAMA 629



Classified By: Ambassador Linda E. Watt for Reasons 1.4 (b) & (d)



SUMMARY

--------

1. (C) Panama's independent Attorney General Ana Matilde

Gomez may have put the government of Martin Torrijos in an

uncomfortable position in March when she asked the Supreme

Court to reopen two three-year-old bribery investigations

into a government contract for Centro Multimodal, Industrial

y de Servicios (CEMIS), along with the January 9, 2002

legislative confirmation of two Supreme Court judges. Both

investigations date from the Moscoso administration. Many

observers believe that the CEMIS bribery scandal -- allegedly

more than $1m in cash changed hands -- may implicate many

sitting and former legislators (including GOP Ministers

Balbina Herrera and Hector Aleman), as well as President

Martin Torrijos and former President Mireya Moscoso. How the

GOP handles the two investigations could become a litmus test

for the current government's dedication to improving

transparency and combating corruption. Torrijos has not

commented publicly on the two cases. By popular calculation

the cases heavily involve PRD members, which highlights the

Attorney General's intention to act unhindered by the

government. Thus far, we have not seen compelling evidence

that would implicate him in the CEMIS scandal. End Summary.



TV Drama and a Little Piece of Paper

--------------------------------------------

2. (SBU) The CEMIS case is not the biggest corruption scandal

in Panamanian history, but it probably is the one that evoked

the most public revulsion. CEMIS is identified with

Democratic Revolutionary Party (PRD) Legislator Carlos Afu

and his fifteen minutes of fame. On January 16, 2002 Afu

appeared on TV waving a large wad of cash, which he claimed

was a $6,000 down payment on a $20,000 bribe to vote for

CEMIS. Afu was trying to make the point that a large number

of PRD legislators had received CEMIS bribes. Afu's

extraordinary public revelation and the lack of any arrests

following it brought public confidence in government

officials to new lows.



3. (SBU) Afu's dramatic TV escapade came after the Assembly

had been roiled by contentious and controversial Supreme

Court confirmation votes for Moscoso nominees Alberto

Cigarruista and Winston Spadafora, in which Moscoso allegedly

bribed several PRD legislators (Afu included) in the

PRD-controlled Assembly to ensure their confirmations. On

January 14, 2002, the day before the Assembly voted to

approve CEMIS, then-opposition PRD legislator Balbina Herrera

publicly denounced Afu for taking a bribe to vote for

Cigarruista and Spadafora. In retaliation, Afu went on TV on

January 15 to wave the cash and claim that he was not the

only PRD legislator whose vote had been bought.



4. (SBU) (Note: The genesis of the Supreme Court case is that

at the end of 2001 Arnulfistas needed PRD votes for Spadafora

and Cigarruista in the PRD-controlled Assembly. Spadafora

reportedly had been involved romantically with President

Moscoso. Cigarruista and Spadafora were confirmed with the

support of three PRD votes, Afu's included. Later, the PRD

expelled Afu, who won re-election in May 2004 to the National

Assembly as an Arnulfista. During the campaign Afu and

then-President Moscoso posed on the dance floor for press

cameras. Complicating the CEMIS case is the legislative

immunity Panamanian legislators then enjoyed, which later

constitutional changes removed. End note.)



5. (SBU) The CEMIS bribes allegedly came from the privately

owned San Lorenzo Consortium. Public Ministry investigators

later came across a piece of paper in San Lorenzo's files

with nothing more than names and amounts scribbled on it.

"Martin," "La Dona," and "Aleman" (possibly Martin Torrijos,

Mireya Moscoso or Balbina Herrera, and Hector Aleman) were to

receive $150,000 each. The rest were to receive smaller

amounts. That piece of paper is the only concrete evidence

turned up by CEMIS investigators directly indicating who was

paid off, and it is unclear at best.



6. (U) Following the Public Ministry investigation, in

September 2003, the Supreme Court voted 6-3 to close and

nullify the Public Ministry's investigation. CEMIS

construction never got under way. In her March 3 petition to

the Court, AG Gomez requested that the Court hold separate

investigations of the CEMIS and Supreme Court cases which her

predecessor, Jose Antonio Sossa, had ordered joined.



Why CEMIS?

----------

7. (SBU) On November 15, 2004 Article 155 of Panama's

constitution was amended to permit the Supreme Court to

investigate legislators while they remain active in the

National Assembly. The demise of legislative immunity became

the legal rallying ground for public officials and civil

society organizations demanding that AG Gomez formally

request the re-opening of the cases.



8. (C) Two heavy hitters in the private sector-- the powerful

Motta family and Hutchinson Whampoa/Panama Ports -- are

pushing to re-open CEMIS but for different reasons, according

to Embassy sources. The Motta family, holders of one of the

largest investment enterprises in the Colon Free Zone (CFZ),

want the case settled so they can buy part or all of CEMIS

from San Lorenzo and get the project restarted. The Mottas,

along with their U.S. partners in the Manzanillo

International Terminal port facility, are already

constructing a new "logistics park" on land adjacent to San

Lorenzo's property. Panama Ports Company (PPC) wants CEMIS

separated from the case against Spadafora and Cigarruista as

political payback against Justice Spadafora, who according to

Palace insiders wrote an opinion declaring PPC's

multi-decade, multi-billion-dollar tax exoneration

unconstitutional. (Note: PPC administers the Cristobal and

Balboa ports. The Moscoso administration, specifically

former Minister of Commerce Joaquin Jacome, granted PPC an

exoneration from paying $30 million a year in taxes for the

next 45 years. Current Minister of Commerce Alejandro Ferrer

asked the Supreme Court to strike down the exoneration upon

entering office. A decision is pending. Rumors abound of

huge PPC bribes paid to Moscoso officials and to Hugo

Torrijos, the president's cousin. Hugo Torrijos, known

popularly as "Mr. Ten Percent," has been implicated in at

least two major bribery scandals relating to abuse of his

former position as Director of the Maritime Authority of

Panama (AMP). End Note.)



Torrijos Is Silent on CEMIS

---------------------------

9. (C) Well-placed PRD sources informed Embassy personnel

that President Torrijos had allegedly asked his private

attorneys for advice on how to keep CEMIS closed. Senior

Solidarity party legislator Leopoldo Benedetti, who said he

"knows for a fact" that Torrijos accepted a large CEMIS bribe

while he was head of the PRD, told PolOffs recently that he

believes that the president would block any actual

investigation into CEMIS. On the other hand, Panamanian Bar

Association president Carlos Vasquez told PolOff that no

clear evidence exists to implicate any senior GOP officials.

Vasquez added that the government's handling of CEMIS would

be a defining moment for its leadership.



Comment:

--------



Politik-ing the Court

---------------------

10. (C) No one in Panama is clear on where CEMIS will wind up

or even why the GOP asked the Court to rule on the case when

it seems incapable of rendering impartial justice. The

pending Supreme Court decision on whether to re-open the

investigations into CEMIS and the buying of votes for

magistrates of the Court comes in the midst of public demands

for the dismissal of all nine justices. (See Reftel.) The

reemergence of the two corruption scandals has only sharpened

the overlapping and conflicting personal interests of the

parties involved, which presumably include present and former

GOP officials and the justices themselves.



Diminishing Support for the AG?

-------------------------------

11. (C) Torrijos's apolitical appointment of Gomez, who

serves for a ten-year term and who is independent of the

administration, undoubtedly is a key decision which he may

come to regret. Her active pursuit of Moscoso-era corruption

and illicit enrichment cases such as PECC, Panama Ports,

DuroDolares, and Fundacion Mar Del Sur comes on the heels of

a predecessor, Antonio Sossa, who took virtually no action

against corruption for ten years. Gomez has had the support

of the president, as well as that of Minister of the

Presidency Ulbaldino Real, and Comptroller General Dani

Kuzniecky. (Note: Kuzniecky, Gomez and Torrijos all attended

the same private grade school. End Note.) Though she

continues to act independently, Gomez's initial hesitation to

request the re-opening of CEMIS at first created a public

perception that she was either inexperienced or subject to

GOP pressure. After she willingly reversed her decision, she

regained public support for her actions. It is too early in

her term to determine how Gomez will respond to GOP pressure,

or how doggedly she will pursue cases that may be inimical to

the GOP's interests. We suspect that the president's support

for Gomez is now more tenuous than before the re-opening of

CEMIS.



WATT